Sumitomo Mitsui launches open innovation space in Tokyo’s most vibrant startup hub

Board members of SMFG at photo session

See the original story in Japanese.

Sumitomo Mitsui Financial Group (SMFG, TSE:8316) earlier this month launched their first open-innovation base named Hoops Link Tokyo in central Shibuya, Tokyo. The group utilizes the venue to hold pitch events, meet-up, and seminars tying up with external organizations related to the startup ecosystem.

Jun Ota (Executive VP / Chief Digital Innovation Officer, SMFG makes opening speech at the press conference

At the beginning of the press conference held on the launch day, Jun Ota (Executive Vice President, SMFG) who presides over open-innovation activities of the group made an opening speech. Since established IT Innovation Department in SMFG two year ago, the group has been financially participating various new business where synergy effects with financial service can be expected, in order to activate the whole digital transformation within the group: SMBC GMO Payment (payments processing joint venture with GMO Payment Gateway),  Brees (barcode-based payment service developing together with NEC), Polarify (biometric authentication system jointly developing with NTT Data and Daon), Financial Link (artificial intelligence- and robotic process automation- powered business process outsourcing service jointly developing with NEC, to be soon rebranded into NCore). The group has been mainly cooperating with large enterprises so far, but aims strengthening of coordination with startups on the occasion of the establishment of Hoops Link.

Also, on the same day, SMFG announced the cooperation with Work-Bench running accelerator for enterprises in the US and StartX, the accelerator of Stanford University. SMFG also unveiled it will start a startup acceleration program in 2018. The detail of the program is still under consideration but is expected to partly adopt conventional activities including Mirai Hackathon or the Mirai incubation initiative which were presented by SMFG or Mitsui Sumitomo Bank.

As open-innovation venues run by major banks, there are some similar cases within Japan, such as The Garage by Mitsubishi UFJ Financial Group (MUFG, TSE:8306) and Diagonal Run Tokyo by Fukuoka Financial Group (FFG, TSE:8354).  In addition, open-innovation activities can be seen recently in the whole financial service industry; Mizuho Bank established a lab within Finolab partnering with NTT Data for its open-innovation support program, Credit Saison (TSE:8253) launched DG Lab jointly with Digital Garage (TSE:4819) and others, JCB started operation of an acceleration program JCB Payment Lab supported by Quantum.

Interview with SMFG’s Goya Furukawa, Manager of Hoops Link Tokyo

Please tell us the history about how SMFG came to start Hoops Link Tokyo:

Goya Furukawa (IT Innovation Dpt., SMFG)

I had been sent to Los Angeles to study abroad until last year. In that neighborhood, there is Silicon Beach known as casual business base including Snapchat but I had received few information that startup business has become active in the Japanese financial industry.

By contrast, I daily heard news about the startups leading fintech or the fintech buyout by banks, such as Venmo known for the P2P money transfer.

Having an awareness of the problem about the difference between Japan and the US, I was assigned to a department in charge of fintech. The Japanese banks are still exclusive and our information given from Otemachi (where Sumitomo Mitsui Banking headquarters and fintech hub exist) will not reach to rising startups which we really deliver it to. To be closer with these startups, I thought we should establish a base in Shibuya.

What will you do in Hoops Link Tokyo?

The pure investment work is not main mission in Hoops Link Tokyo. Its first aim is to broaden business range or to be a base to create new business. Although we have a system covering strategic investment, I think it is important whether a startup deserves collaboration with us. Anyway, since our possible partners have not recognized it yet, our immediate aim is to meet them and stay close with them.

We will support doing something together or matching with another. If we received requests to collaborate with bank or group companies, Hoops Link Tokyo works as the window, as one and more SMFG staffers always stay there. We are also considering Office Hour-like service (walk-in consultation in the business hour) inviting staffers from group companies.

Geodesic Capital (the fund known as being founded by ex-the US Ambassador to Japan John Roos) and ERA (Entrepreneurs Roundtable Accelerator) are in cooperative relationship with us and will introduce us investment / support targets in the US. I want to realize cooperative activities centered on Hoops Link Tokyo; we have these funds to introduce startups having technologies / idea adoptable to our service or we can support these startups when they advance into the Japanese market.

Can you tell us the hours of operation and the frequency of events?

The hours of operation of Hoops Link Tokyo is from 9am to 9pm on weekdays. We plan to hold about three events in a week, mostly at night. Setting the third week of September as “executive week”, we will provide sessions over five consecutive nights having guests who performs as mentors in Hoops Link Tokyo (accepting reservation for participation on the website).

We have to take priority of holding events initially, but I want everyone to recognize where we are and which kind of network we have. I will be glad if they think that bank is an open environment than expected or are concerned about the possibility of collaboration.

Do you have KPI (key performance indicator)-like measure for Hoops Link Tokyo?

We did not set KPI for Hoops Link Tokyo. However, it would be meaningless if it does not achieve any long-term outcome. To stretch a point, the final KPI of Hoops Link Tokyo will be the exit how we succeeded in business creation.

Photos of Hoops Link Tokyo

You can mark Shibuya West Branch of Sumitomo Mitsui Banking, next to Mega-Donki. Hoops Link Tokyo is on the 6th floor of the building.
Exiting the elevator, you can see the entrance decorated with photographs in sepia tone, bringing back memories of old good days.
Under the theme of challenges in difficult situations, Hoops Link Tokyo is designed in the motif of a bar in 1920s during prohibition. The bookshelf works as a hidden door.
Each meeting room is named after cocktails such as Grasshopper or Bluesky.
Kitchen will be useful in events, stocking a large amount of liquers.

Translated by Taijiro Takeda
Edited by “Tex” Pomeroy